Women entrepreneurs need further support in Montenegro

The aim of this report was to review the main features of the institutional, legislative and educational system, business climate, barriers as well as possibilities for women’s entrepreneurship development in Montenegro. It also aimed to develop recommendations for accelerating procedures, introducing incentives and effective processes in establishing an economic environment which stimulates future development and improvement of female entrepreneurship, especially in small and medium enterprises in Montenegro.

It assessed the following ten key areas using desk research of available data and official documents, in-depth interviews with decision-makers and focus groups:

What is the situation of women in the labour market of Montenegro?

The position of women in the labour market is considerably worse than that of men, especially with regard to possibility for advancing in business hierarchy and accessibility of managing positions.

According a UNDP research women in Montenegro face different barriers, which translate into horizontal and vertical gender based segregation of professions. These barriers include stereotypes in choosing education and professions, traditional roles of women, prejudices and also lower professional aspirations of women compared to men.

Instead of investing in career development, women are traditionally directed to less paid jobs in lower positions which leave enough time for family responsibilities. Therefore, there is a lack of women in Montenegro in managing positions (in private and public sector as well as in politics) which would generate visibility, better income and higher social status for them. The feminization of certain professions is an issue as well, in addition to the existence of so-called "glass ceiling" and the gender wage gap which shows that women's income is 86 per cent of that of men's for work of equal value.

Are there many women entrepreneurs in the country? Which sectors do they prefer?

According to an analysispublished by Montenegro Statistical Office (MONSTAT) in March 2012, only 9.6 per cent (2 025 in 2011) of business entities are owned by women, while 90.4 per cent (19 102) of businesses are in men’s ownership.

This data places Montenegro behind the EU and neighbouring countries. Also, other private sector surveys indicate that MONSTAT’s data do not reflect the real situation, but rather include several women who are only formally business owners but management functions and entrepreneurial activities are performed by their male relatives (spouse, brother, son).

Regarding the size of business, women were the most common in small enterprises, while only one woman was found in the class of large companies.

The share of active business entities owned by women is the highest in the area of social protection (38.5 per cent), employment (22.2 per cent), advertisement and market research (21.5 per cent) cleaning of environment and waste management (33.3 per cent). Women’s share is also considerable in health care (20.8 per cent), social protection with accommodation (20 per cent), supporting activities in financial services and insurance (22 per cent), and other personal service activities (16.3 per cent). On the other hand, active business entities connected to forestry, fishing, mining and quarrying, production of leather, pharmaceutical products, motor vehicles and other transport means, as well as scientific research and development, are completely owned by men (100 per cent).

What is the rate of women among top managers in big companies?

Results of a research conducted by Montenegrin Employers’ Federation in 2012 show that women’s participation at the top management level is only 42 per cent and they are the most represented at the middle management level (54 per cent). This research also indicates that 74.5 per cent of companies implement certain initiatives with the aim to promote gender equality in employment, retention, promotion and professional training.

Is it easy to start a new business or run a successful business in Montenegro?

The World Bank survey “Doing Business 2014" is carried out in 189 countries, including Montenegro. The survey indicator “Ease of Doing Business” ranks economies from 1 to 189, where a high ranking reflects a regulatory environment that is conducive for business operations. The data shows that Montenegro has improved in time, moving from 50 in 2013 to 44 in 2014. The indicator “Starting a Business” records the officially required procedures (number, time, cost and paid-in minimum capital) to start and operate an enterprise and ranks countries accordingly. Montenegro’s rank in this regard worsened from 2013 moving from 57 to 69 for the 2014.

Is it easy for women to start new business compared to men? Do they face any discrimination?

Conditions for entrepreneurship development are worse for women than for men due to, among other things, deeply rooted patriarchal attitudes in the Montenegrin society. Gender inequality is manifested in the lack of women's political participation, economic inequality, unequal share of the family duties, differences in property ownership that put women in a very difficult position to start their own business.

For a large number of women, entrepreneurship is not the primary goal in life - they see it as a way to contribute to their family income. Hence, women entrepreneurship in Montenegro is now in the early stages and it can be called "entrepreneurship out of necessity" which is characterized by the need to find alternative employment.

Does the society support women to run a business on their own?

The formal requirements are created, but the practice shows that development of women's entrepreneurship still requires full institutional support and appropriate incentives. In our society, women are not sufficiently recognized as equal partners in the economic arena, which leaves them in a worse position when starting and running their own business.

In traditional economies such as Montenegro, the challenges of women's entrepreneurship development can be double. The initial challenge is to legally define and strengthen the basis of enterprise in the formal economy, so women could strengthen and expand their business. Another challenge is to promote entrepreneurship and business opportunities with high growth potential among educated and qualified women, so that their businesses are strong from the very beginning and have a potential for growth and job creation. In order to solve these challenges successfully, it is necessary to provide women with access to a number of key financial and non-financial resources, as well as a business environment that excludes gender-based institutional, cultural, regulatory and legal barriers which would limit their business activities.

Does the Montenegrin legislation provide equal opportunities for women and men?

Montenegro has established a legal and institutional framework and adopted policies and strategic documents that support gender equality, promotion of women's rights and economic empowerment of women.

The structure of Montenegro is defined by the Constitution of Montenegro adopted 2007 as the highest legal act. The Constitution introduced the principle of gender equality through two articles. Article 18 guarantees the equality between men and women and obliges to develop policies on equal opportunities, while Article 8 prohibits any direct or indirect discrimination on any grounds. These provisions of the Constitution are further defined in detail in the Law on Gender Equality and The Law on Anti-Discrimination.

In addition, Montenegro has established institutional mechanisms at all levels (national, regional and local) in order to support legal and policy framework for promoting gender equality. Separate bodies have been established responsible for improving the economic status of women and women entrepreneurship development.

Do women have the same access to credits and other financial services as men?

The lack of access to finance is the main barrier for women and men entrepreneurs for starting business. However, Montenegrin women less often use commercial loans to start business than men. The main reason is that only 6 per cent of women are owners of a property which can be used as collateral to get a business bank loan.

According to a MEF research conducted among men and women entrepreneurs, commercial loans are more accessible to men, while women largely establish companies using a variety of state-supported programs aimed at entrepreneurship development. This suggests that commercial credits to start business are still less available for women.

A UNDP research on potential female entrepreneurs in Montenegro (published in 2012) also points out that the access to finance is one of the biggest barriers for starting business. 42 per cent of respondents stated that concerns about funding were the first and the most important reason behind the decision not to enter into business, while 14 per cent of women indicated family responsibilities preventing them to start business.

What kind of help would be the most useful for women to be successful in business life?